Since the global economic crisis, sharp divergences in economic performance have contributed to considerable stock-market volatility. Now, equity prices are reaching relatively high levels by conventional measures – and investors are starting to get nervous. Read more

Seven years after the financial crisis, global capital market banks have largely achieved compliance with tough new capital standards. However, the economic damage to their businesses in doing so has divided the industry into survivors, committed to strategies that are likely to succeed in a permanently changed world, and laggards that have lost their way. Read more

Xi Chen, assistant professor of Information, Operations and Management Sciences, recently received a Google Faculty Research Award to support his research on "Statistical Learning and Decision-Making for Complex Crowdsourcing Tasks." Read more

The world will always be divided into “the haves and the have nots,” but lately seems the ‘haves’ are capturing more and more of the world’s wealth. Yet, even the super wealthy are feeling the impact of political turmoil. Here are five stats that explore the plight—and flight—of the world’s richest. Read more

Excerpt from The Economist -- "...the paper shows that the benefits of scale are not shared equally among all workers. Using data on wages at British firms, they divide workers into nine groups according to how skilled they are. Over time, they find that the proportional difference in wages between the groups grows as firms get bigger. This trend is driven entirely by a rising gap between wages at the top compared with the middle and bottom of the distribution. As the authors note, this is very similar to the trend in income inequality in America and Britain as a whole since the 1990s, when pay for low and median earners began to stagnate." Read more

Excerpt from Inc. -- "Eggers, and his co-author Lin Song of Beijing's Central University of Finance and Economics, studied two groups---serial entrepreneurs in Beijing and venture capital funded companies in the U.S. They found that the entrepreneurs who failed, but who stuck to the same industry had at least as good, or better outcomes with subsequent businesses as cohorts who changed industries." Read more

In a new study, Professor JP Eggers of the NYU Stern School of Business and Lin Song of the Central University of Finance and Economics in Beijing find that serial entrepreneurs whose previous ventures failed are likely to blame the external environment and to change industries for their subsequent ventures. Read more

In the wake of the Great Recession, a contentious debate has erupted over whether fiscal consolidation, less formally known as ‘austerity’, is helpful or harmful for economic growth. One side argues that austerity is expansionary when achieved via spending cuts rather than tax increases. An alternative view, consistent with textbook prescriptions for countercyclical fiscal policy, suggests that fiscal consolidation is harmful to growth when implemented in the midst of a crisis. Both camps, however, ignore the wealth of information inherent in comparing the economic performance of countries that pursue fiscal austerity with those that opt for a different path. Read more

Excerpt from The New York Times -- "Thomas Philippon, a finance professor at New York University’s Stern School of Business, is another academic who has studied the role of finance in the economy. In a November 2012 article in The Quarterly Journal of Economics, Mr. Philippon and Ariell Reshef, an economist at the University of Virginia, reported on wages in the United States financial industry from 1909 to 2006. Among their findings: Finance accounted for 15 to 25 percent of the overall increase in wage inequality between 1980 and 2006." Read more

Excerpt from The Economist -- "A recent paper* by Uma Karmarkar of Harvard Business School and Bryan Bollinger of Duke Fuqua School of Business finds that shoppers who bring their own bags when they buy groceries like to reward themselves for it. For two years the authors tracked transactions at a supermarket in America. Perhaps unsurprisingly, shoppers who brought their own bags bought more green products than those who used the store’s bags. But the eco-shoppers were also more likely to buy sweets, ice cream and crisps." Read more

Monetary policy has become increasingly unconventional in the last six years, with central banks implementing zero-interest-rate policies, quantitative easing, credit easing, forward guidance, and unlimited exchange-rate intervention. But now we have come to the most unconventional policy tool of them all: negative nominal interest rates. Read more

Excerpt from MediaPost -- "Craig and co-authors William Greene and Anthony Versaci (of AIG) analyzed 62 wide-release films over a six-month period. Among the top factors that led to increased online buzz were the film’s budget, its genre (horror and action do better than other genres) and whether the film is a sequel or not. 'This goes to show that studios do not have to remain passive bystanders, but can become actively involved in managing consumer engagement online,' Craig says. 'Similarly, studio executives can get an early read on its prospects.'" Read more

Just in time for the Oscars, Professors C. Samuel Craig and William Greene of the NYU Stern School of Business, and co-author Anthony Versaci of AIG, are releasing a new study demonstrating that online buzz prior to a film’s release is a good indicator of its future box office success. The authors contend that movie studios are in a position to use “e-buzz” to their advantage by adjusting advertising budgets and marketing strategies in real-time to increase the film’s likelihood of success. Read more

Fairness is a loaded word, but, whether we like it or not, it is at the heart of the political economy of debt restructuring in Europe. Until we reach some understanding on this issue, the conversation will continue to run in circles. Clearly the odious debt argument does not apply to Greece (Beck 2015). Greece was and is a democracy. Greek citizens elected the governments that ran the reckless fiscal policy that drove Greece into a deep financial crisis. Read more

According to the findings of Professor Johannes Stroebel and his co-author, Joseph Vavra of Chicago Booth, if you buy a house in an expensive neighborhood, you should expect higher prices at the checkout counter, too. In their new paper, House Prices, Local Demand and Retail Prices, the researchers demonstrate that rising house prices lead to a corresponding increase in local retail prices. Read more

Excerpt from Entrepreneur -- "While Kilduff stipulates that in any real-world case studies there are various factors at play and so attributing causation can be tricky, he points to the rivalry between U.S. automakers in the 1990s. 'It seems as if those three automakers were so intensely competing with one another that they didn't pay attention to anyone else, allowing Japanese automakers to come in and overtake them.' A similar dynamic likely played out between Coke and Pepsi. The soft drink giants poured so much energy into tracking one another's movements that Kilduff speculates they entirely missed the emergence of popular new energy and health drink brands." Read more

Excerpt from Newsweek -- "Conducted by Jason Chan, assistant professor of information and decision sciences at the University of Minnesota and professor Anindya Ghose from NYU’s Stern School of Business, the study revealed a surprising increase in cases of HIV when a city adopted the intermediary service provider." Read more

Excerpt from Chicago Tribune -- "Buying stuff to make ourselves feel better after a failure is not only expensive but could backfire and lead us to think more about our shortcomings, according to the study, 'Perils of Compensatory Consumption,' by Rucker, the Northwestern professor, Monika Lisjak of Erasmus University, Andrea Bonezzi of New York University and Soo Kim of Cornell University. Just as bad, retail therapy can strip consumers of mental resources and impair their self-control, the study says. And less self-control has been shown to potentially lead to excessive spending." Read more

Now that the decision has been made in Washington to reset Cuban-American relations, it's a good time for an outside perspective on where things may go from here. Bottom line: Cuba may well become a rising star in the region and an attractive economic partner for the U.S. if things are managed well. In financial terms, Cuba will be a "buy" when the time comes. A recent visit revealed some impressive strengths buried not far below the surface. Read more

The new Congress is sure to take up the eternal question of reforming the tax code, and just as surely there will be debate about whether cutting corporate taxes will help stimulate employment and boost income. Read more

Excerpt from Science 2.0 -- "The change in the law created an opportunity for Graham and his colleague Deepak Hegde, an assistant professor of management and organizations at NYU's Stern School of Business, to examine which inventors were choosing to opt into the secrecy loophole, and whether their patents differed in important ways. They examined 1.8 million granted patents filed at the USPTO from 1995 to 2005 and analyzed the disclosure preferences of the inventors. Their analysis found that, among those not seeking foreign protection, about 85 percent of inventors filing a patent since 2000 chose to disclose information about their patents prior to their approval." Read more

When managers make strategic investment decisions, they tend to anchor their decisions on the average return on investment, or average ROI, that can be expected post-investment, rather than on the anticipated marginal profit measured by the discounted cash flow, or net present value (NPV) – thereby deviating from a firm’s overall goal of maximizing profit. This decision-making behavior, subtle but critical, was recently demonstrated by NYU Stern Management Professor Zur Shapira. Read more

Excerpt from Forbes -- "...Prudential Investment Management recently issued a report arguing that urbanization across the globe is in its 'prime time.' The report cites a projection from New York University professors Paul Romer and Brandon Fuller that cities worldwide will gain more than 60 million people annually over the next three decades." Read more

In a new study, Professor Deepak Hegde of the NYU Stern School of Business and Stuart Graham of Georgia Institute of Technology discredit the conventional wisdom that public disclosure by inventors of their proprietary knowledge when their patents are pending is costly for them because it alerts rivals and facilitates imitation by others. Read more

With Republicans taking over the Senate this week, many Americans are wondering: What now? Some are hoping for more constructive engagement between Congress and the president, now that the GOP might want to try to show that it, too, can govern. But there's good reason to believe that's wishful thinking. The destructive dynamic of recent years is not the result of one or two factors that can be easily reversed. Rather, it is the result of at least 10 trends that have played out over the past half-century. Here are the most important things to understand about how Washington became so broken. Read more

The stock market knows more than any individual investor, and China's is no exception. The launch of deposit insurance, announced in November and to be implemented in the new year, will effectively reduce the implicit government guarantee of China's high-yielding shadow banking wealth-management products. Read more

Excerpt from Economic Times -- "As a researcher, Menon is known for her study of consumer memory, information processing and emotions in the contexts of survey methodology. She is also a respected educator and a prominent scholar and is actively involved in PhD education, all of which she owes to her Indian roots." Read more

Of all the financial markets that should be resistant to manipulation, foreign exchange surely tops the list. With $5.3 trillion traded daily by thousands of buyers and sellers across the world, this should be one hyper-efficient market. Read more

Chinese Internet Czar Lu Wei's high profile visit to Facebook founder Mark Zuckerberg's office this week is just the latest signal that China is engaging Western tech firms, but on its own terms. Read more

European Economic Snapshot, written by Professor Thomas Cooley and co-authors Peter Rupert, Zachary Bethune and Valerie Bostwick, presents the authors' views on the current European economic environment, based on releases from Eurostat and other organizations. The data is presented in a way that the authors find useful for assessing where we are in the business cycle and tracking the economic recovery of several large European countries. Read more

Last week, as Uber battled a media firestorm after a senior executive talked of investigating unfriendly journalists and a company manager actually used its “God View” feature to track the comings and goings of a reporter, Airbnb welcomed more than 1,500 of its most productive providers to its first-ever host convention, an immersive celebration one expert attendee likened to a Mary Kay event. Read more

In November 2014, the ECB published its asset quality review (AQR) and comprehensive assessment (ECB 2014), as well as capital shortfall estimates based on its stress test. These results differed widely from our earlier assessment (Acharya and Steffen 2014). Indeed, the two shortfall estimates are negatively correlated. Read more

In every major movement for greater democracy and the protection of human rights, university students have played a central role. From Tiananmen in China to Tahrir in Egypt, student movements have elevated public discourse on human rights. On some human-rights issues that affect universities themselves, such as in addressing global sweatshop practices, student groups have served as catalysts, prompting colleges and universities to assume a leadership role in our society. Read more

Digging into some big data—everything from Google searches to the tone of news stories—might be able to tell us whether this market is headed for a correction. Proponents of "wisdom of the crowds" contend that such data may contain within it some key insights about specific variables of interest. So can we find any evidence of this wisdom in big data? Read more

The first thing I learned in law school is that law school is not for learning the law. My decorated professor explained that we would spend twenty hours each week reading and discussing cases—and that very few of those cases would ever again figure in our lives as lawyers. Those hours were not wasted, but it was not because they filled our heads with legal content that they were useful. Read more

Why did Jean Tirole win the Nobel Prize in Economics? Not for the highly-regarded work on competition between small numbers of firms with which his career began more than thirty years ago but for more recent work on how carefully structured regulation can improve performance relative to unbridled market forces. This is a reminder that serious students of market performance take market failures seriously. Read more

The challenges of converting the "made in China" brand into a quality brand are immense, but so are the rewards. A national quality improvement initiative is the pathway to transform China from a low-cost to high-value economy, points out Eitan Zemel in a speech given at the 17th Annual Business Forum in Shanghai. Read more

The nature of work itself is dramatically changing due to the concept of an ‘on-demand’ workforce. Studies have predicted that up to 40% of the U.S. workforce population will be part of this ‘on-demand’ labor pool (contractors, freelancers and temp workers) within the next six years. The primary motivation for companies to crowdsource, whether for labor, design, ideas or funding, is to reduce costs in a challenging economic environment, as well as to harness the skills, collective knowledge and wisdom of the crowds to complement the skills of their employees. Read more

I have to admit that I never really gave the number of women in data science much thought until recently. Maybe it was because, by some lucky accident, my NYU faculty advisor’s two other PhD students also happened to be female. And about half of my predictive modeling group peers at IBM Research were female. And half of the PhDs here at Dstillery are female. Read more

A previously obscure nonprofit corporation that essentially governs the Internet — the Internet Corporation for Assigned Names and Numbers (ICANN) — has featured prominently in recent news stories due to the U.S. Department of Commerce's plan to relinquish its key oversight role. Details of this transition will be high on the agenda as ICANN stakeholders meet in Los Angeles this week. Many observers fear that ICANN could soon be subject to the heavy-handed influences of governments that do not share the values that have led to the innovation, flexibility and openness that has hitherto characterized the Internet. Read more

Money and Banking, written by Professor Kim Schoenholtz and co-author Stephen Cecchetti of Brandeis International Business School, focuses on current issues in finance and economics. The authors approach the evolution of the financial system with the motto “understand the principles, understand the future.” Read more

US Economic Snapshot, written by Professor Thomas Cooley and co-authors Peter Rupert and Zachary Bethune, presents the latest version of the economic snapshot, based on releases from the BEA, BLS, and other organizations. The data is presented in a way that the authors find useful for assessing where we are in the business cycle and tracking the US economic recovery. Read more

Excerpt from CFA Institute -- "I don’t think there is one right way to do investing. The markets accommodate all these different points of views, and actually there is money to be made [using many of these approaches] although it’s getting harder all the time. People have the same skill sets, and they are all pretty well tagged up." Read more

Since the Greek debt crisis began in 2009, Professor Nicholas Economides has been studying the country’s economic and political landscape. His research has earned the respect of the finance minister, prime minister and other government leaders with whom he has close ties. Read more

Achieving a fit between a brand and a consumer is a sure sign of success among marketers. But according to new research by NYU Stern Professor of Marketing and Dean of the Undergraduate College Geeta Menon together with her co-authors Tuck’s Amit Bhattacharjee and Wharton’s Jonah Berger, explicitly defining that fit can backfire. Read more

In new research that analyzes data from China’s stock market from 1995 to 2012, NYU Stern Professors Jennifer Carpenter and Robert Whitelaw, along with undergraduate student Fangzhou Lu, find that despite its reputation as a “casino,” China’s stock market has functioned well by several measures. Read more

Over the last year, Sarah Labowitz and co-authors have conducted extensive research on the supply chain for garments, including a wide range of interviews and focus groups with buyers, suppliers, workers, and policymakers in Bangladesh, New York, Washington, Berlin, and Geneva. Read more

Using data compiled by Shlomo Angel, a Senior Scholar and Adjunct Professor at the Urbanization Project, the digital videos showcase the expansion of 30 global cities over the last 200 years, animating the extremely rapid expansion of these cities in the 19th and 20th centuries. Read more

In their paper, “Predicting the Next Big Thing: Success as a Signal of Poor Judgment,” Christina Fang and Jerker Denrell show that “because extreme outcomes are very rare, managers who take into account all the available information are less likely to make such extreme predictions,” whereas those who rely on intuition and gut instincts are more likely to, in essence, go for broke. Read more

In his new book, Professor Prasanna Tambe explores the potential for big data to transform human resources and investigates some of the most important issues affecting the labor market and workforce management today. Read more

In their new book, Kristen Sosulski, Clinical Assistant Professor of Information, Operations and Management Sciences and Director of Stern’s Center for Innovation in Teaching and Learning, and co-author Ted Bongiovanni introduce the information and skills required of successful online students. Read more

Thirty years ago China seemed hopelessly mired in poverty, Mexico had triggered the Third World Debt Crisis, and Brazil suffered under hyperinflation. But in recent decades, these and other developing countries have turned themselves around, while First World nations, battered by economic and fiscal crises, struggle to stay afloat. With the global economy teetering on the brink, America’s prosperity now depends on our ability to learn from these prior foreign struggles—and successes—with economic reform. The stakes are higher than ever and Turnaround: Third World Lessons for First World Growth, by Peter Blair Henry, reveals the three things we need for a more prosperous future. Read more

In their new book, Jill Kickul, Clinical Professor in the Business & Society Program Area and Director of Stern’s Program in Social Entrepreneurship, and Sophie Bacq of Northeastern University outline the complexities in the field of social entrepreneurship, examining issues at the individual, organizational and institutional levels. Read more

Noted scholar and finance expert Silber draws on hours of candid personal interviews and complete access to Volcker's personal papers to render dramatic behind-the-scenes accounts from Volcker's career at the Treasury Department and the Federal Reserve. Read more

In his new book, William J. Baumol, Harold Price Professor of Entrepreneurship and academic director of NYU Stern’s Berkley Center for Entrepreneurship and Innovation, identifies the "cost disease" as a major source of rapidly rising costs in service sectors of the economy. Once we understand that disease, he explains, effective responses become apparent.Read more

NYU Stern economists Viral Acharya, Matthew Richardson, Stijn Van Nieuwerburgh, and Lawrence J. White provides a rational analysis of how Fannie and Freddie collapsed and why housing finance in general is broken in their new book. Read more

In "The Righteous Mind: Why Good People Are Divided by Politics and Religion" (Pantheon, March 13, 2012), Professor Jonathan Haidt walks through the world of morality and politics. He explores why our political leaders cannot seem to work together and points the way forward to mutual understanding. Read more

Regaining the confidence of investors and the public is one of the most critical issues facing managers and executives in public enterprises today. In Winning Investors Over: Surprising Truths about Honesty, Earnings Guidance and Other Ways to Boost Your Stock Price (HBR, November 17, 2011), Baruch Lev, Professor of Accounting and Finance at NYU’s Stern School of Business, draws from his original research and that of other leading finance and economic scholars to provide managers with evidence-based strategies for avoiding capital market setbacks and riding them out when they do occur. Read more

In a business world of nonstop change, there's only one way to win the game: Transform it entirely. This requires a revolution in thinking – a steady stream of disruptive strategies and unexpected solutions. In Disrupt, Luke Williams, executive director of NYU Stern’s Berkley Center for Entrepreneurship and Innovation and clinical associate professor of marketing and innovation, shows exactly how to generate those strategies and deliver those solutions. Read more